Fertiglobe, the world’s largest seaborne exporter of urea and ammonia, said its third-quarter net profit more than doubled as it benefitted from a rise in selling prices.
Net profit attributable to shareholders for the three-month period to the end of September climbed to about $291.6 million, from $137.7m recorded a year earlier, the company said on Thursday in a filing to the Abu Dhabi Securities Exchange, where its shares are traded.
Adjusted net profit surged 84 per cent to $291.5m.
“We are pleased to report another very solid set of results, driven by a step-up in urea and ammonia prices, supported by tight market balances outweighing the usual seasonal slowdown,” chief executive Ahmed El-Hoshy said.
Revenue in the third quarter rose 52 per cent on an annual basis to $1.32 billion while adjusted earnings before interest, taxes, depreciation and amortisation grew 64 per cent, year on year, to $606m.
Fertiglobe, a joint venture between Adnoc and Netherlands-listed OCI, said it had “good visibility” for the fourth quarter and the first half of 2023 as demand picks up in key import markets.
“The outlook for the fundamentals of Fertiglobe’s nitrogen end markets continues to be underpinned by tight supply, healthy farm economics and decades-low grain stocks globally, which incentivise the use of nitrogen fertilisers,” the company said.
Production in the EU, a large supplier of nitrogen fertiliser products, has been curtailed due to a steep drop in Russian natural gas imports.
CF Industries Holdings, the world’s largest nitrogen fertiliser producer, on Wednesday reported a profit, compared with a loss a year ago.
“The conditions that have supported nitrogen prices for the last year … show no signs of abating,” CF Industries Holdings chief executive Tony Will said.
“As a result, we expect the global nitrogen supply-demand balance to remain tight, with attractive margin opportunities for low-cost producers further into the future.”
Fertiglobe, which announced a dividend of $700m for the second half of 2022, said its free cash flow increased to $189m in the third quarter, from $56m a year earlier.
The company seeks to help existing and new clients looking to use hydrogen in the form of ammonia for marine fuels, power generation and other industrial applications, Mr El Hoshy told The National in an interview in January.
When heated to extract hydrogen Ammonia — which is largely used in fertilisers and industrial applications from manufacturing of plastics to textiles and pesticides, automotive and cosmetics — does not produce carbon.
Hydrogen is gaining importance as the fuel of the future and low-carbon hydrogen is deemed essential in decarbonising hard-to-abate industrial sectors including heavy transport in the future.
Last year, Adnoc, Mubadala Investment Company and Abu Dhabi holding company ADQ formed an alliance to develop a global hydrogen centre.
Adnoc subsequently announced plans to build a blue ammonia plant in Ruwais while Abu Dhabi Ports-owned Kizad said it would invest $1bn in a green ammonia plant.
In a separate statement on Thursday, Fertiglobe said it would produce diesel exhaust fuel from its Egyptian Fertilizer Company plant in the fourth quarter, with trial shipments to be marketed by OCI in Europe.
Diesel exhaust fuel is a urea solution used to reduce environmentally harmful vehicle exhaust emissions from diesel engines.
Fertiglobe has the capacity to produce 500,000 tonnes of the fuel at its plants in Egypt and the UAE, it said.
In June, Moody's Investors Service assigned a “Baa3" long-term issuer rating to Fertiglobe, with a stable outlook, while Fitch Ratings allocated a first-time long-term issuer default rating of “BBB”, with a stable outlook.
The company is also rated “BBB-” by S&P Global Ratings.
In October last year, Fertiglobe raised about $795m in its initial public offering amid strong demand from international, regional and local investors.
